European Football Picks - Review

We are over halfway into the European football season and we have had some rather interesting results. We started the year with a very rough run of results before stabilising in September and going on a tear in October. Then we regressed a bit in November going into December before making some back again in January so far. We are on track to be profitable but it's not slam dunk profitable - it depends heavily on how consistently you have been betting the football picks and also how rigorous your line shopping has been. For example, if you had missed the pick on Bayern to draw with Union Berlin back in November (or you had missed the alt line for Bayern not to win), your balance would be noticeably less profitable than if you had taken that pick. Due to the transition to moneyline betting, the variance of your balance over a small sample size is going to be larger (even though it will actually be smaller over a large sample size). This is something to bear in mind when taking the football picks as moneyline is the more natural environment for this kind of football but it leads to much harsher feast and famine periods compared to American style high volume betting.

I should preface this by revisiting a point I made last summer when I was analysing the previous season's picks (following on from what I alluded to at the end of the last paragraph) and that is the blind spot that exists around the pick'em spread when two teams are reasonably evenly matched. My contention was that spread betting maintains a reasonable edge when the spread size is 0.5 or larger but when we went lower (-0.25 to 0.25) is when we began to chase our tail. Unlike American sports, where an overvaluation on one side implies an undervaluation on the other, this is not the case in association football. It can be the case that both sides are overvalued and the undervaluation is on the draw (or conversely, both sides are undervalued and the draw is overvalued). This means that when you choose a side in a pick'em, you may well be backing an overvalued side no matter who you choose. Indeed, a pick'em can be built synthetically by the right combination of moneyline side to win and moneyline draw. If both teams are overvalued moneyline, you are losing value by taking the pick'em.

I had thought that such a situation is inherently unprofitable but not quite for the reason I had originally thought. Indeed, a pick'em is in effect a two way moneyline where you are refunded if the two teams draw. In calculating the expected profit of a pick'em, you must multiply the win probability of the team you're backing by the pick'em odds in fractional format and subtract the loss probability. To find the break even condition, you set expected profit to zero and observe that the fractional odds must be the loss probability divided by the win probability. Therefore, the profitability of the pick'em relies less on the specific draw probability but rather on the ratio of win to loss probabilities. Where the unprofitability comes in is via the overround. If you are on a prediction market, you can circumvent this via synthetic spreads, which I alluded to above and described in previous posts. In effect,the overvaluation on the win moneyline can be negated and even exceeded by the edge on the draw moneyline. Nonetheless, if we have a strong conviction that both teams are overvalued, why would we not take the draw? Or even go one step further and sell both teams if we are on prediction markets (the synthetic draw, which I have also described in other posts)?

This is not to say that the pick'em does not have its place. It is ironically useful for games where the spread is very much not a pick'em and you have conviction that an underdog may very well get the win but you want to hedge against them coming up short with the draw. This draw no bet is still very popular in football betting on such games where the spread may be one or two goals already. It provides a three step risk profile where you don't lose out if the teams draw but you get a higher payout than if you had taken the +0.5 spread (equivalent to double chance market, no moneyline on prediction markets and Dutch position where you take out moneyline win and draw such that total return is the same whether team wins or draws). If you find the risk profile of full moneyline betting daunting, these are perfectly legitimate options to take and sometimes they do have a bigger edge than pure moneyline if you are taking them on bookmakers. Indeed, simulating the +0.5 via selling moneyline is the cornerstone of my alt line and synthetic draw strategy on prediction markets.

A large part of why I did not like the Asian handicap markets was because the bookmakers generally (but not always) juice them more than the equivalent moneyline options. Just take a look on BetOnline for example and you'll generally find that games in the major leagues have 3-4% overround between the three moneyline options while the spread options are often closer to 4.75% as this is the overround of the standard -110 both sides spread. There are simply better edges not only on moneyline but also on prediction markets where you can eliminate the overround entirely with the right limit orders. At the time, Polymarket only had yes and no markets on moneyline. In the time between, they have added spreads and totals, so I view these as very viable options now, although liquidity is still a concern and they have still not found an adequate solution to integral spreads (for example, +1, -2 and they don't have any direct option for pick'em). If you are more comfortable with the risk profile of Asian handicap, you can take that option without losing the same level of edge as you would have a year ago and you might even find a greater edge if you can get filled on the larger orderbook spreads.

One more note on risk: the official picks went from 1% of bankroll to 2% of bankroll for football picks early in November. I welcomed this change as it came with the newfound success of the system. I personally do take the picks at 2%, even though I deploy alt lines for long shot wins and draws. If you are not actively following association football or you have a lower tolerance for risk, I would discourage you from taking the official picks at 2% unless they're spreads or priced similarly to them. Taking the draw or moneyline when a team is not favoured by at least half a goal and only placing 1% of bankroll on it is perfectly fine. This system is as Barnes said, feast or famine. You are going to go on some pretty brutal losing streaks, the kind that can make you want to stop taking the picks. If scaling down to 1% helps keep that in perspective as you continue to take the picks, I would encourage that or even scale down to 1% and 0.5% if that helps you weather those storms. I will continue to take the official picks at 2% as I am confident in the results of my backtesting.

Note that prediction markets are not currently supporting quarter fractional spreads. You can form these synthetically but I personally think it's more bother than it's worth. You can also form a synthetic +1 from the right combination of the +1.5 (if available) and no on the other team. The same is true of the -1. The methodology is the same as laid out in the synthetic spreads for NFL I described in a post a few months ago. My focus will continue to be on the draw and the +0.5 as these are both the "key numbers" in football betting. As far as I am concerned, everything in football game management is downstream of these strikes. Team will often settle for a draw despite having the firepower to go for the win (cough cough Massimiliano Allegri) and by he same token, teams will often try and see out a one goal lead rather than go for another goal. Both of these factors combine with the much longer amounts of added time than there used to be for last minute goals, which are often the crucial goals that decide results.

Now, some patterns: I will lay these out in relative terms as line shopping is often the difference between making a profit and a loss along a particular axis Last season I was consistently able to get better lines than the official picks even on BetOnline but since the transition to prediction market style picks, I have not always been able to do this. Especially with the draws, I sometimes see a draw line put out by Barnes and I can't even get it with the synthetic draw. On the whole, if you line shop effectively over a large sample size, you should be able to achieve a relatively comparable closing line value.

First, the Premier League has been profitable, as it was last year and as far as I'm aware was the original league Barnes issued picks for. It is probably the most heavily bet league in the world (though I stand open to correction on that), so remaining consistently profitable on that is no small feat. The high energy and physical nature of the Premier League makes it amenable to both underdogs and tough fought out draws.

The Bundesliga has been more of a mixed bag. Despite the egalitarian nature on the Bundesliga by design due to high fan involvement in the running of clubs, it is still fundamentally a one team league dominated by Bayern Munich. We were able to find good angles against the spread for teams playing Bayern Munich last season but playing moneyline against them has missed far more often than not. They are one of if not the best team in the world at destroying teams that are a clear level or more below them. If it weren't for that draw with Union Berlin, the Bundesliga may have looked a fair deal more unprofitable right now. Therefore, the Bundesliga may require a more careful treatment.

When I took a look at the Serie A results, I did a double take, but we appeared to be haemorrhaging money. Sure I remember us having some misses on Italian football but we also had some hits too and Serie A is also a competitive league with no dominant teams, so should be amenable to at least our draw strategies. Here is where I noticed two patterns. Firstly, Inter Milan have been resurgent under Cristian Chivu and more than that, they have played a more offensive strategy than under Simone Inzaghi, whose departure we expected would really impact Inter Milan. Not so. Not only has fading Inter Milan not worked out this season, betting on them to draw has been a disaster too. They did not draw a game this season until their draw against Napoli, a game in which Antonio Conte got sent off from the sidelines and yet his team still managed to get an equaliser and hold out. This ironically was a game we took Inter Milan to win. We may have misjudged Inter Milan and it would partially explain why we are lagging on Serie A. Looking now at AC Milan, under Massimiliano Allegri, AC Milan has been a draw machine, drawing eight times and losing just once. We have benefitted from those draws to an extent, but we could have leaned into it more. Their draw odds are trading as high as 33c pre game, which is crazy, so we may have missed out on the easy side of things. Serie A should be a very, very profitable league for us: I do believe we need some adjustments there and I will be honing in on that afterwards.

La Liga has been middling. I haven't got a good read on where we're underperforming but it is a big team dominant league, which means profitability is going to rely on teams like Barcelona and Real Madrid underperforming. The middle of the pack is more evenly matched since they don't get anywhere near the TV revenue that the big clubs do. Draw angle might have some potential and due to Real Madrid and Barcelona's dominance, they may have an edge as favourites in certain circumstances.

Ligue 1 has been profitable. PSG have regressed somewhat so far this year, which has made fading them profitable. The challengers at the top have not been able to win consistently so that has provided us with some opportunity.

English Championship has a smaller size but profitable so far. I don't have much to say on this until we have a larger sample size. The overround tends to be bigger on Championship games as it's not quite as sharply bet, so try to play these on prediction markets if you can. You'll normally have enough liquidity.

I haven't done a proper analysis on the European Cup competition picks as I get my data from football-data.co.uk but Joseph Buchdahl does not keep betting data for European competitions, for some reason. My main angle of concern is that the new group stage format has led to a fall in tactical draws as goal difference does make a difference to seeding. It's not clear to me if we are on the right side of the tracks in the Champions League group stages and with just one game left this year, it may be next season before we can really test it. The knockout stage was profitable last year, so hopefully we will be able to keep that up.

A note on the data I am using: I take the average moneyline as reported from the source above, which generally has an overround of 6-8% (very large, but I am stress testing the official picks). If you are using sharp bookmakers or prediction markets, you will get far better value. I simulated the no by Dutching the other two moneyline options. My alt line strategy is to take the no whenever an official pick recommends the win or draw for a team against an opponent who is favoured by at least half a goal (that is to say, favourite to win is minus money). The alt lines yielded slightly better returns though that may be smoother variance. The real edge of the alt lines is selling premium on the favourites as it can readily be seen on recent activity on prediction markets, the dominant action is normally on buying the favourite. Furthermore, I did not compare this with taking every game against the spread as this would mean I would have to choose a side in a straight pick'em, which although I can turn a pick'em into a draw, I can't turn a draw into one and only one pick'em.

Finally, I have no data on international football. Very small sample size and wildly varying game circumstances make it harder to get a consistent read on it. I will be doing deep dives for the World Cup as this is going to be a big, big tournament and there will be crazy amounts of money bet on it. Maybe even more than bet on the NFL this year since it's a market that will be watched by billion around the globe. I am already on Brazil to win the World Cup under Carlo Ancelotti and I believe the Club World Cup last year will be somewhat useful for giving us a hint on how American teams will perform. Association football will be a massive opportunity for the rest of the season and beyond. After the Super Bowl, I will be dedicating more of my time and energy to it as I believe some sharp angles here will really pay off.